This document summarizes a study on customary institutions for managing common property resources in the Mustang region of Nepal. It finds that villages traditionally used a "Mukhiya system" led by democratically elected village headmen to govern resources like forests, irrigation, and pastures. However, these institutions are facing challenges from factors like centralized government policies, increased migration, and climate change impacts. The study uses the Institutional Analysis and Development framework to examine how these institutions are adapting to manage changes in resources and community needs over time. Initial findings suggest institutions will need to adjust further to incorporate new stakeholders and livelihood diversification as climate change progresses.

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Title: From Customary to Customized Institutions for Adaptation to Change in the
Mountains
Rajan Kotru, Nawraj Pradhan, Narpat Jodha
Rajan Kotru is the Regional Programme Manager (Transboundary Landscape Management) at the International
Centre for Integrated Mountain Development – ICIMOD, Kathmandu, Nepal. E-mail: rkotru@icimod.org
Nawraj Pradhan is an Ecosystem Adaptation Analyst (Environment Change and Ecosystem Services) at the
International Centre for Integrated Mountain Development – ICIMOD, Kathmandu, Nepal. E-mail:
npradhan@icimod.org
Narpat Jodha is a Senior Visiting Scientist, at the International Centre for Integrated Mountain Development –
ICIMOD, Kathmandu, Nepal. Email: njodha@icimod.org
ABSTRACT
The effects of climate change in Nepal are pronounced among poor and marginal populations
whose livelihoods are primarily natural resource based, and where climate change has a potential
to cause long-term transformations in local socio-ecological systems. In the study pilots of
district of Mustang community livelihoods in the mountains are characterised by subsistence
agriculture. History shows that communities here are managing key natural resources like
forests, rangelands, and water under traditional governance structures. The local institutional
arrangement on CPR‟s are organised by the local “Mukhiya System”. Traditionally the selection
of village head men or „Mukhiya‟ is not only democratic, but even distribution and allocation of
water are inbuilt in their social hierarchy, the informal rules and regulations according to local
communities have proven to be an efficient customary governance model. However, with
changing times, these institutions are being challenged since apart from non climatic factors such
as dominant role of the states in shaping development policy and practice, imposing of top-down
statute by the state and increased role of elected local governance bodies, and finally out-
migration, climate change impacts are fast affecting such institutions. It is important to
understand how traditional institutions are managing CPRs or whether their transformation to
manage change is happening. The study analysis draws on Ostrom‟s Institutional Analysis and
Development (IAD) framework, One of Ostrom‟s defining contributions is the framework, used
to analyze policy relevance and effectiveness of institutions. The framework also describes three
levels of action: operational, collective choice and constitutional choice. These three are
interconnected since, for instance, the outcomes of the „constitutional choice‟ affect any
„collective choice‟ decision-making, which in turn affects operational-level activities. Generic
data collection methods were used and data was analyzed using „systematic qualitative
technique‟. Five assessment criteria were identified: validity; reliability; objectivity; acceptability
to respondents. The most popular and widely used methods were one-to-one interviews and
FGDs. Institutional diagnosis of CPRs was done by analysing locally pertinent issues for
institutional arrangements such as ppolicy and development; markets; and out-migration. The
institutions were assessed by using good governance parameters such as efficiency, equity,
accountability and adaptability. The early analysis shows that roles of CPR‟s for sustaining rural
livelihoods has changed over time as multi-stakeholdership in resource use and diversification

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are shaping future incomes. This means that institutional arrangements need to adjust. Moreover,
effective service delivery, whether it involves health care or natural resource management,
requires more than implementing policy.
Keywords: Common Property Resources (CPR); Collective action; Customary institutions;
Governance; Institutional structures; Natural resource governance; Communities and Climate
Change.
INTRODUCTION
The effects of climate change are most pronounced among poor and marginal populations whose
livelihoods are primarily natural resource-based and where climate change has a potential to
cause long-term transformations in local socio-ecological systems (Rodima-Taylor, Olwig et al.
2011). Community livelihoods in the mountains are characterised by subsistence agriculture.
History shows that where a community is able to protect their natural resource-based livelihoods
collectively, they are able to sustain themselves. Common Property Resources (CPRs), or rural
commons, are institutional arrangements within communities to collectively manage and harness
their natural resources to complement the gains from individually owned natural resources
(Jodha, Singh et al. 2012). Managing key natural resources like forests, rangelands, and water
under traditional governance structures in mountains is common practice. However, apart from
non-climatic factors, such as the dominant role of the states in shaping development policy and
practice, the imposition of top-down statutes by the state and increased role of elected local
governance bodies, and migration, climate change impacts are fast challenging customary
institutions. Such institutions are caught between modernism and traditionalism. Further, the
creation of new institutions by external agencies then challenge customary institutions, as issues
of inclusiveness, poverty and governance become a priority. Institutional contexts, including not
only specific institutions but their interlinkages, thus emerge as mediators not only of resource
access but also of access to adaptive strategy options, conduits for delivery of external support,
and are therefore integral to local (individual and communal) livelihoods, adaptive practices and
innovations (Upton 2011). Therefore, research on the social dimensions of adaptation to change,
customary institutions and their multi-scale approach to mediate responses to climate variability
require innovation and need to be embedded into social and ecological processes that determine
collective actions on the ground. It is important to understand how traditional institutions are
managing CPRs or whether they are transforming to manage the present changes. Customary law
and practice forms the basis of group tenure and collective resource management in many parts
of the world. In at least 28 of the 411 cases included in a worldwide study, there are indications
of some level of reliance on customary authority (both with and without state support) for
regulating access to forests, fisheries and lands that are managed as common property (Fuys,
Mwangi et al. 2006). However, in areas where traditional systems have already fallen into disuse,
problems of resource abuse appear imminent (Turkelboom, Gurung et al. 2001). A study from
CGIAR‟s Collective Action and Property Rights initiative (CAPRi) and the International Land Coalition (ILC) sent out a call for case studies to
contribute to a joint study on “Rural Common Property in a Perspective of Development and Modernization.” 41 case studies on common
property systems from 20 countries in Africa, Asia, Europe and Latin America were synthesized between June and September 2005.

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Zimbabwe suggests that the gap between traditional institutions and design principles for
sustainable common property resource management can be bridged by making small continuous
institutional changes over an extended period of time (Dore 2001). Traditional institutions,
although sometimes considered to hinder people‟s incentives, may enhance the sustainable
livelihoods of people living in fragile environments (Omura 2008).
In a study conducted by the International Centre for Integrated Mountain Development
(ICIMOD) (Jasra, Joshi et al. 2012), the ownership of pastoral communities was reported as one
of the main issues concerning pastoralists in the Hindu Kush Himalayan (HKH) rangelands.
However, despite 83% of rangeland in Nepal belonging to local communities, uncontrolled
grazing, inadequate governance and management, and climate change were perceived as the
main challenges. It is important to understand the institutions managing these resources. This
paper drew evidence from cases of the local „Mukhiya‟ system in the Lower Mustang region of
Nepal, which dates back about 400 years..
Geographical and historical contexts:
Nepal has traditionally relied on locally evolved governance structures for everything from
managing and sustaining farming practices to organizing religious and cultural functions. These
governance structures have helped fulfil the needs of the community and ensure self-reliance.
However, efforts made since the 1950s for decentralization have, instead, led to the process of
centralization (Bhattachan 2002). Table 1 gives a succinct account of CPRs in a host of districts
in Nepal in terms of their use, management and sustainability. It is evident that CPRs have a
consistent local value for ensuring subsistence livelihoods. Therefore, for the purpose of
sustainability, community management is of great significance. At the same time, as signs of the
degradation of CPRs are frequent, local institutional arrangements need to be better understood
and strengthened.
Table 1: Status of CPR’s in Nepal.
Common
property
Resources
Use Management Sustainability
Location Type of study
Subsistence Commercial Local
Government
initiated
Sustainable Degrading
Community
Forestry
    All districts of
Nepal
Literature review (APFSO
II,DoF, 2005
    Mustang
Field study
Leasehold
forestry      27 districts of
Nepal Report review LFLP 2011
Medicinal plants
   
Humla, Dolpa,
Jumla.
Literature review, Luitel.
H. 2002, Kunwar. et.al.
2006
Cordyceps
Sinensis,
Morchella
conica,
Zanthoxylum
Armatum   
Baitadi, Darchula
Literature review,
CIRRUS 2008
Bamboo     Sindhuli
Literature review, RECS
2010
Irrigation
   Mustang
Filed study + Literature
review,(Neupane & Bhatt,
2010)
   Rupandehi
Literature revies,
(Bhattachan. K.P.2002)
water    Accham, Dailekh,
Jajarkot & Kalikot
Literature reviews,
HELVETAS 2010
crops     24 districts of
Nepal
Report review (CARITAS
Nepal 2010)
Communal
pastures
    Mustang
Filed study + Literature
review, (Pokhrel & Chetri
2006)
   Rasuwa, Dopla
Literature reviews,
(Bhattachan. K.P.2002;
Thomas. Et.al 2004
Source: Table modified in context to Nepal, from (Turkelboom, Gurung et al. 2001).

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A classic study of the diversity of property rights systems used for many centuries by Swiss
peasants (Netting 1981) observed that while individuals fully divided their agricultural land into
separate family-owned parcels, grazing lands located on the Alpine hillsides were organized into
communal property systems. The same individuals here used different property right systems
simultaneously for multiple centuries (Ostrom and Hess 2011). In the „Mukhiya‟ system, the
village headmen determines the use of rights to resources, the specific access and withdrawal
rights, sharing of maintenance costs and future investments, and allocation of annual returns
from common production activities within the community.
A consistent finding on communal property rights systems is that these do not exist in isolation
and are usually used in conjunction with individual ownership. In most irrigation systems that
are built and managed by the farmers themselves, for example, each farmer owns his or her own
plot(s) while participating as a joint proprietor or owner in a communally organized irrigation
system (Ostrom and Hess 2011). It is argued that the government policy should facilitate the
emergence of effective, local institutions for rangeland management in Nepal. Given the limited
grazing land available to many communities in the region, a critical aspect of this will be finding
ways to legitimize current patterns of extensive resource use that traverse existing „community‟
boundaries. (Bennett, Ainslie et al. 2010)
Mustang is a unique district where the government policy envisions the use of CPRs for income
generation and environmental restoration, and government line agencies are supportive to local
communities. With emerging climate challenges, local communities and NGOs are demanding
an increasingly active role of public institutions in the delivery of updated technological options
to strengthen their coping capacity (Rodima-Taylor, Olwig et al. 2011). Despite the importance
accorded to the role of local institutions in fostering climate change adaptation, few researchers
have investigated how the challenges of managing natural resources may induce new forms of
institutional arrangements. Much of the attention in developing countries has focused on the
impact of climate change on natural systems, producing little insights on the present and future
adaptability of whole systems.
Furthermore, rural areas are increasingly connected to regional and national markets, and, in
many cases, opportunities to earn income through commercial use of the commons are
expanding. While this trend may help rural households improve their livelihoods by drawing on
resources from the commons, it can also lead to disputes among different user groups or between
the poorer and the better-off families within a community (Fuys, Mwangi et al. 2006). Besides,
market-driven processes tend to enhance differentiation within the community leading to decline
of collective decisions and actions (Jodha, Singh et al. 2012).
The following research draws on Ostrom‟s Institutional Analysis and Development (IAD)
framework, used to analyze the policy relevance and effectiveness of institutions. The framework
takes into consideration that policy processes and outcomes are affected, to some degree, by four
variables that are not under the control of individuals: attributes of the physical world, attributes
of the community, rules that create both incentives and constraints for certain actions, and
interactions with other individuals. The framework also describes three levels of action:

5. 5
operational, collective choice and constitutional choice. These three are interconnected since, for
instance, the outcomes of the „constitutional choice‟ affect any „collective choice‟ decision-
making, which in turn affects operational-level activities. For example, in India, joint forest
management is a programme under the State‟s participatory action-promoting policy, which
encourages communities to collectively form Forest Protection Committees that are expected to
make operational rules for resource use, monitoring and sanctioning.
METHODS
Case study:
The high mountain and Himalayan areas of Nepal, which are mostly located in the 18 mountain
districts, comprise 42% of Nepal‟s area, 9% of its cultivated area, 79% of its pasture area and
32% of its forest area. These 18 districts had in 2001 a population of 1.7 million, which is 7% of
Nepal‟s total population. These numbers indicate a sparse population with moderate access to
low productive agricultural land, but abundant pasture and forest resources. The human
population here is a mix of Tibetan-origin ethnic groups, the best-known of which are the Bhote,
Sherpa of the East, and the Thakali from Mustang.
Mustang lies in the mid-western part of Nepal. Earlier studies (Neupane 2010), mention
traditional institutions in Upper Mustang, mainly around Lomanthang and headed by a local
ceremonial king2
who still plays a significant role in the distribution of water, as a part of a
system that builds on local hierarchies and stratification, which divides society into an upper
ruling class and lower working class. It has been pointed out that the water allocation system in
this region is unequal and there is an asymmetrical relationship between the upper class villagers
who run the system and the lower class farmers. However, this is not the case in the study area in
Pangling and Marpha villages of Lower Mustang. Not only is the selection of village headmen or
„Mukhiya‟ democratic, the even distribution and allocation of water are also inbuilt in their
social hierarchy. The informal rules and regulations according to local communities have proven
to be an efficient customary governance model; however, with changing times, customary
institutions are challenged with factors affecting their governance.
Box 1: Selection of village headmen and Mukhiyas in Lower Mustang
The Mukhiya, or village head, is selected through a democratic process. In Lower Mustang,
mainly Marpha, the „Thakali community‟ has four castes (Hirachan, Lalchan, Juharchan and
Pannachan). These communities nominate candidates to be elected as one of the four Mukhiyas.
The four Mukhiyas are then selected locally; each Mukhiya gets a rotational term of one month
to lead as village headman for year. The elected Mukhiya and its committee serve a term for up
to two years, and most of the representatives are male. Each village or community have their
own nomination and selection rules.
The Mukhiya system is a committee formed by locals who elect a village headman, the Mukhiya
and its committee serves as the sole decision making body. The role of Mukhiya governance
2
In 2008, Nepal became a Republic, the functions of the local king in Mustang (Jigme Palwar Bista) are now only
ceremonial.

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ranges from natural resource management to solving family issues (land separation, divorce and
marriage). This committee also acts as the interface between locals and local state or civil
organizations. Any outside agency (state or civil organizations) discusses the implementation of
development projects and programs with the local Mukhiya system. It is usually through a
general consensus among the Mukhiya and its community that decisions for implementation are
then communicated to outside agencies. Locals have observed that the ten-year Maoist
insurgency did not affect the Mukhiya system mainly because of its role in managing local
governance with social unity.
Data Collection
Analyzing quantitative and qualitative perspectives of CPR theories and the role of effective
„institutions‟ in the management of natural resources, this research was initiated to understand
the role of customary institutions in managing resources, and, given the challenges outlined
above, if and which collective actions are necessary for future adaptive management strategies.
Data collection is based on anecdotal data, informant interviews, and focus group discussions
(FGD). Interviewees were purposively selected from the FGD participants to share their personal
experiences and perceptions of changes in resource use (Bennett, Ainslie et al. 2010).
The key research questions are: a) Which collective actions are taken by local institutions?; b)
What are the decision-making structures?; c) How can institutional diagnosis be tested against
future inclusive and proactive decisions needed to counter climate change and other human-
induced changes for consolidated coping strategies?; and d) Which process steps could be
suggested to these institutions to manage the change?.
For this study, existing data and information was used from ICIMOD‟s on-going work in the
Lower Mustang region. Literature review and desk study was conducted along with field study to
gather updated local information from relevant stakeholders. ICIMOD‟s Vulnerability and
Capacity Assessment (VCA) is a practical participatory rural appraisal (PRA) tool that can be
used to conduct assessments of vulnerability and capacity in relation to climate change in
mountain areas (Macchi 2011). Therefore, this tool was used to supplement information missed
in questionnaire surveys and key person interviews. At the field level, a combination of open-
ended questions, questionnaires, key informant interviews and PRA tools (see Table 2) were
used. Farmers were interviewed face-to-face as this is the most accurate method for surveying
people who sometimes cannot read and write (Shikui). A Venn diagram (see Figure 1) was used
in focus group discussions as this tool helps local communities identify their association with key
local institutions and the importance and significance these institutions play in their day-to-day
lives. A Gender Equality and Social Inclusion (GESI) situation and analysis (see Table 4) was
conducted in Pangling. The main purpose of this analysis was to get some ground truthing on
gender dynamics in statutory and customary institutions, the roles and responsibilities of men
and women, and the management and control of resources in this region. Preliminary analysis of
qualitative data and questions formed the basis of this research.

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Table 2: Overview of VCA Assessment tool
Assessment tool Purpose Source of information
Literature review To gain solid knowledge of the
context that the VCA is set in
(climate data, study site
characteristics) as well as an
overview of what assessments
have already been carried out and
what knowledge has already been
generated in the study area
Existing climate change data,
census data, assessment reports of
NGOs or IOs, project baseline
studies, evaluation reports,
policies, maps, scientific articles,
grey literature, and others
Participants observation
 Transect walk
To become familiar with the
mountain community and their
daily practices in dealing with
climate and socioeconomic
change through intensive
involvement with them in their
natural environment
Community members (men and
women)
Focus group discussions (FGDs)
 Community historical
timeline
 Seasonal calendar
 Livelihood seasonal
monitoring calendar
 Community ranking of
hazard severity
 Venn diagram of
institutions
To obtain a better understanding
of the livelihood strategies and
assets of the communities in the
study area, their dependence on
different resources, the changes
they perceived, their capacity to
cope with these changes, and their
needs as well as to gain
information on the role of
different institutions in supporting
them to cope with and adapt to
perceived changes
Community members (men and
women), representatives of local
organizations
Semi-structured interviews To obtain a greater depth of
information on the implications of
climate and other changes on the
lives of mountain people and on
their capacity to deal with these
changes
Community members (men and
women), representatives of local
organizations
Source: ICIMOD VCA Tool, 2011
Data Analysis:
Data collected were grouped separately. The data was analysed using a „systematic qualitative
technique‟ and five assessment criteria were identified: validity; reliability; objectivity;
acceptability to respondents. While all the methods have distinct strengths and weaknesses, there
was a lot of ambiguity in the literature. The most popular and widely used methods were one-to-
one interviews and FGDs. Overall 58 resource persons were selected from the study area in
Lower Mustang.

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RESULTS
To get a concise account of the status the results are being discussed below keeping focus on the
Mukhiya System as the institutional arrangement in managing CPRs.
Institutional arrangement in managing CPRs:
The role of local institutions has shaped how rural residents respond to environmental
challenges. Because adaptation to climate change happens at a local level, it is critical to better
understand the role of local institutions in shaping adaptation and improving the capacities of the
most vulnerable and different social groups (Agrawal 2010).
Nepal has recently drafted a rangeland policy to manage CPRs (ICIMOD, 2012). There are five
ministries working jointly in coordination with line agencies at the local level to manage CPRs in
areas like Mustang where rangelands dominate, including the ministries listed below:
 Ministry of Forests and Soil Conservation (MoSFC)
 Ministry of Local Development (MoLD)
 Ministry of Environment, Science and Technology (MoEST)
 Ministry of Home Affairs (MoHA)
 Ministry of Culture, Tourism and Civil Aviation (MoT)
The above ministries have line agencies at the local level coordinating various projects and
programs for managing public land and supporting development and innovative livelihood
strategies. Table 3, gives a summary of the roles and involvement of various local state agencies
and other local institutions involved in managing CPRs in the Lower Mustang region.
Table 3: Summary of key institutions in Mustang
Local state institutions Roles Collective action and
external interventions
District Development Committee
(DDC)
Development projects Irrigation channelling, road
building, water supply
District Agriculture Development
Office (DADO)
Training, local technical support Farmer field schools, pest
management, distribution of
seedlings
District Livestock Service Office
(DLSO)
Support to animal husbandry and
health care of livestock
Training on livestock
management, construction of
tanks
Department of National Park and
Wildlife Conservation (DNPWC)
Participatory governance,
biodiversity conservation,
promotion of the sustainable
management of forests
Management of protected area
and forests
Local non-state institutions Roles Collective action and
external interventions
Mukhiya Meetings, information sharing,
communication, conflict
Pasture management, irrigation,
land and water management,

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resolution, decision making. mobilisation of local
communities
Mother Group Micro-credit, social mobilisation,
capacity building
Local mobilisation, farm
management
Annapurna Conservation Area
Project (ACAP)
Natural resource conservation,
services, training and technology
transfer
Drinking water, irrigation,
agriculture and livestock
development, participation with
local community
Civil societies/NGOs Capacity building, training,
awareness workshops, action
research pilots, innovative low-
cost technologies
Demonstration plots, monitoring
stations
Communities in Pangling were asked to draw a Venn diagram to illustrate the presence and
networking between various local institutions (see Figure 1). In Lower Mustang, the
communities have a stronger link with the village head (Mukhiya) and other community groups
than other institutions and organisations, although they still recognise an association with other
state and district agencies.
Figure 1: Venn diagram of local institutions and stakeholders in Pangling Village,
Mustang.
Health
Post
District
Level
Offices*
VDC
Secretary
Agriculture
Service
Centre
Livestock
Service
Centre
Pangling
Primary
School
Committee
Father
Group
Mother
Group
Pangling
Village
Village
Head
Note: * District Development Committee; Agriculture Development Office; Livestock Development Office; Annapurna
Conservation Area – ACAP; Soil Conservation; others
Source: Focus Group Discussion, 2011

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In interviews with state and external agencies it was found that approval from the local Mukhiya
was almost mandatory before planning or implementing any development projects or programs
in the region. Local state agencies consult with Mukhiyas to get their views and consensus.
Because there is a strong local mechanism in place, coordination between local and state actors
in managing and planning relevant programs and projects usually does not lead to any conflicts
in these areas. However, there is still confusion on land tenure as policies on rangelands in Nepal
are yet to be implemented (ICIMOD 2012). On the other hand, the landscape is being treated
under Annapurna Conservation Area Project (ACAP) which is mixing conservation efforts with
local development and has therefore got a positive response so far. This reflects at least the
responsiveness of the Mukhiya System to address degradation through support to conservation
efforts. Voluntary service to repair local infrastructure is further evidence that the system is
multifaceted and locally owned even in the fast changing times.
Policy and Development
A new policy on the management of land, including rangelands, is currently being drafted in
Nepal. The policy document mentions laws that will ensure the delineation of rights for
conserving, promoting and using public land. It further mentions that public land, which falls
within areas that are traditionally used as pasture lands by local communities, will be demarcated
and the rights of livestock herders will be ensured (ICIMOD 2012). Through focus group
discussions, the locals agreed that few causes of local conflicts , they were identified as , access
to grazing land, access to water resources on rangelands, uses of rangeland resources for
different purposes, the issue of tenure of large pastures, boundary conflicts from household to
various administrative levels, the confusion of land tenure, and road construction.
In Mustang, land outstrips the population. Local state agencies have developed a vision for the
use of public land for collective benefits. Through the coordination of District Offices, the state
is encouraging communities to access public land in order to manage CPR for income generation
and natural resource conservation through the provision of technical support. Good practices
have been identified in Tangwe Village in Chusan Village Development Committee (VDC), and
collective action initiated by state agencies in cooperation with communities are promoting
schemes such as commercial apple farming and harvesting of non–timber forest products
(NTFP). State line agencies provide support, the fencing is done by DDC, terracing by DSCO,
planting materials supplied from DADO and forage from DLSO. Likewise, collective potato
farming is taking place in some villages of Upper Mustang. In Jharkot Village in Muktinath
VDC, a women‟s group runs a cooperative, which encourages women to engage in NTFP-based
enterprise. These initiatives in Chusan and Muktinath VDCs have motivated many other
villagers, including those in Pangling, to adopt the same approach in managing CPRs.
Accordingly, Pangling Village has already planned for the management of a plot for intensive
use such as apple and forage plantation and potato farming with support from line agencies and
other organizations. However, there are always risks associated with diversification and
development projects and programs.
Market:
While mountain specificities call for supply condition-driven adaptations, globalization pushes
for the demand-driven over-exploitation of resources, including fragile lands and their selected

11. 11
products (Jodha, 2007). Market products of mountain regions have a high value nationally and
globally. It is important for states and communities managing CPRs to appropriately assess
market entry in the field of CPRs as it can carry risks and opportunities. Most of the local
producers interviewed mentioned that equitable links between communities and market agencies
can help enhance opportunities and reduce risks. Mustang has a range of high-value products
such as apples and medicinal and aromatic plants, but due to improper value chains systems,
coordination, and weak institutional policy support, local producers reap a meagre share of the
value of the final product or service. Much of the benefit accrues to people and places at higher
levels on product value chains such as processors and exporters. The survey indicated that with
support from future public and civic investment projects, local farmers gave a high priority to
apple production as compared to other income diversification activities such as livestock rearing,
agriculture or tourism.
Migration:
This research also indicates that out-migration is an issue in this region, though in a few cases in
Pangling, youths have returned due to opportunities in agriculture and apple farming. With a
sizeable income flowing in to local communities from “Remittance Economy” households
appear to make their own choices and decisions. There is concern among the Mukhiya System
members on continuity if trend of the out-migration continues. Thus local farm labour now is to
great extent coming from neighbouring mostly inaccessible districts. There is a rise in the
tourism sector in the Annapurna region, induced reverse migration from the lowlands to the
highlands as people found lucrative business and employment opportunities in the mountains.
The mountain tourism hubs of Ghandruk, Jomsom and Manang in the Annapurna region have
benefited from the influx of government and non-governmental organisations in generating
employment opportunities (Nepal 2007; Kollmair and Banerjee 2011).
This is compensating for the deficit of household members and in turn allowing them to carry on
the private land use with good returns. Any conflict with in-migration workers is still settled by
the Mukhiya System. Since private land maintains its productivity through full utilisation and
lead to assured incomes, CPRs are increasingly losing attention and therefore degraded further.
Even the planning for restoration becomes less interesting as these lands are only seen as buffers.
The Mukhiya system is not able to agree or effect a rehabilitation of these lands even if
interventions are funded from outside, it shows that local control and decision-making is still
inadequate.
Institutional Analysis and Development Framework: Assessing Institutions
The Institutional Analysis and Development (IAD) framework relies on four interrelated criteria
to assess the overall performance of institutional arrangements: 1) efficiency, 2) equity, 3)
accountability, and 4) adaptability (Ostrom, Schroeder et al. 1993; Imperial and Yandle 2005).
Ostrom refers to the three attributes that lead to institutional action, i.e., physical setting,
community setting and rules in use. It is also important to understand the relationship between
institutional performance and policy outcomes (Imperial and Yandle 2005). The following
sections describe the IAD framework‟s components to analyze CPR management of the Mukhiya
system as an institution.

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Figure 2: IAD framework analysis (physical, community and rules-in-use attributes) in the
context of Lower Mustang
Physical Setting:
•Water Scarcity in dry months
(channeling canals)
• Pasture land degraded
(overgrazing)
Community Setting:
• Collective action strong
• Mukhiyas interaction with outside
agencies strong
• Horticulture -Apple farms
• Out migration of youths
• In migration of labour
Rules in-use:
• Controlled grazing
• Conflict resolution mechanism
• Maintenance of canals
• Land tenure (issues on large
pastures)
• Mukhiya system entry point for
external interventions
Action Arena
Patterns of
Interaction
Outcomes
Evaluation
Criteria
The attributes of the physical world, community, and rules in use in Figure 2 explain the current
situation analysis using the IAD framework.
The customary institution of the Mukhiya system has control over most of the attributes as
described in the given figure. The only concerns are the in-migration of labour workers into
Mustang, what risks this might have for local governance and whether there are proper norms in
place to address these issues.
Figure 3: IAD framework analysis (action arena, interactions, outcomes and evaluation
criteria) in the context of Lower Mustang

13. 13
Physical Setting:
Community Setting:
Rules in-use:
Action Arena:
•Mukhiyas and
independent farmers
• User associations
• State agencies
•Civil societies
• Business sector
Patterns of
Interaction:
• Mukhiya and state
agencies collective
and consultative
work
• Coordination
among institutions
• Community &
Business interface
Outcomes:
• Maintenance of
canals
• Use of CPR for
collective programs
• Joint initiatives –
External Projects
• Markets
Evaluation Criteria:
• Efficiency – quick and fair decision making body
• Equity – social inclusion, fairness in water distribution, Low
monitoring costs as rules are defined.
• Adaptability – Customary norms; Willingness to adapt to
changes (inclusion of woman; address migration; support from
state and civil agencies for co management)
Efficiency:
Efficiency in the context of Mukhiya system is evident. A court official in Mustang mentioned
that there are very few cases in the District Court compared to the piles of court cases pending in
other parts of Nepal. Local issues related to natural resources, local conflicts, land, divorce and
other local administrative issues are solved by the Mukhiyas. As a result, locals find it easier to
resolve their disputes within the Mukhiya system than going to government judicial bodies
(administration, office, police or court). It is also important to consider administrative efficiency
(Imperial and Yandle 2005). Community-based approaches and decision making processes are
likely to incur lower administrative time and costs than other state institutional arrangements.
Locals mention that the cost of information and travel to district headquarters in search of justice
is rather expensive. Moreover, these institutions act as a common village stakeholder to negotiate
and bridge the gap between the community and external environment (state agencies, private
sector, etc.).
Equity:
It is important to understand the institutional structure or decision making process to be fair and
equitable in the distribution of resources. Governance and decision making structures of
customary institutions in Mustang are more related to a patriarchal social system. Although the
role of women at the household level is relatively strong, their integration and participation in
customary institutions like the Mukhiya system is weak. Even though it has been difficult to
integrate women into the natural resources management organizations, there have been some
successes in the establishment of women‟s committees. For example, in Jharkot Village in

14. 14
Muktinath (Village Development Committee, Ward 4 and 5, Lower Mustang), a women‟s group
runs a cooperative which has engaged women in NTFP-based enterprise like juice making .
According to the head of the DSCO, the cooperative uses public land for NTFP production and
has earned NPR 1.5 million3
(USD 16,900) out of an investment of NPR 0.7 million (USD
7,909). Such initiatives have encouraged traditional, male-dominated institutions, like the
Mukhiya system, to consider addressing gender inclusion in decision making processes. Table 4
provides an analysis of access and control over resources by gender in Pangling Village. In
Upper Mustang, elite families usually control and govern resources. For example, irrigation
canals were built on the initiative of the upper class, and they still play a crucial role in the day-
to-day management of the system in terms of decision making and networking. However, in
Pangling and Marpha in Lower Mustang, groups are not marginalized and everyone has a fair
chance to elect Mukhiyas and their committees.
Table 4: Access and control over resources by gender in Pangling Village, Mustang
Resources
Access Control and
ownership
Men Women Men Women
Land √ √ √
Training √ √ √
Technologies* √ √ √
Equipments (thresher) √ √ √
Inputs/chemical fertilizers and pesticides √ √ √
Goats/chyangra √ √ √
Horses and mules √ √
Cattle √ √ √
Information** √ √ √
Education √ √ √ √
Non-agricultural business*** √ √ √ √
Cash √ √ √ √
Seeds √ √ √ √
Community building √ √ √ √
Chickens √ √ √
Total no. of resources. 15 14 14 8
* Early varieties of apples, black plastic compost making and off-seasonal vegetable
seedlings
** Information related to price of apples, potatoes etc.
*** Woollen trading in India during the winter
Source: Field Analysis, 2012
Accountability:
Local customary norms are usually informal, although local constitutional rules are also recorded
in writing. The question is whether these community-based systems can be held accountable to
the larger section of society and people living downstream. The local systems do not have any
legal authority to punish free-riders for violations; the methods of fining and punishment are
merely social. The primary job of the Mukhiya is to set new rules and regulations and bring
justice in management and development of the community. A supportive committee known as
Note: 3
Exchange rate of US dollar (USD) to Nepali rupee (NPR): USD 1 = NPR 88.50 as per Nepal Rastriya Bank,
2012

15. 15
‘bhadra bhaladmi’, also elected by the community, supports the Mukhiya in complex decision
making. There have been no cases where the local Mukhiya system has been held accountable
for their actions; however, there have been times when few locals have felt the decisions made
by customary institution did not provide justice as expected.
Adaptability:
Given the limited grazing land available to many communities in the region, a critical aspect of
adaptability will be finding ways to legitimize the current patterns of extensive resource use,
which traverse existing „community‟ boundaries (Bennett, Ainslie et al. 2010). Getting the rules
right takes a long time (Imperial and Yandle 2005). Irrigation projects and programmes in
Mustang and in other parts of Nepal have tried to improve the availability of water, and, with the
support of the national government or donor organizations, they all hope to benefit local farmers.
However, because they rarely recognize existing, locally-sanctioned norms, they run the risk of
destroying the social capital that has developed over centuries within these communities. Many
studies show the crucial role that such social capital plays in the governance of common
resources. It takes a long time to develop accepted rules and norms of governance for these
resources, but relatively little time to erase them (Neupane 2010).
Policy Outcomes:
Good management practices of customary institutions, like those of the Mukhiya system, have
led village development programs and government offices to coordinate and implement
programs through these instructions at the local level. However, as shown earlier, when
degradation of landscape has gone beyond control, policy and programme initiatives have not
shown any impacts on rehabilitation. Local line agencies, which implement such policies, are not
able to convince this institutional arrangement to effect restorative actions. Partly this is due to
the fact that local communities are economically doing well through income diversification and
assured farm production. On the other hand, any restorative attempts on vast rangelands is going
to be affecting the free grazing and thus no-cost gains from it. It is only when local government
is taking a decision that such lands can be utilised for other short-term productive uses and funds
are provided that CPRs are created (e.g. Communal horticulture). Since in harsh climate
restorative investments have a long and uncertain gestation periods, policy outcomes on such
CPRs are difficult to measure or perceive.
It is often noted that in Nepal development and research projects are at times not successful over
the long term as they either fail to meet farmer expectations or are unsustainable and unstable.
Poor communication with local farmers is another barrier to the smooth implementation of
research and development projects. According to state professionals, a lack of funding, poor
infrastructure, and illiteracy are major limits in research, extension, and management
interventions. However, in Mustang the Mukhiya system plays a very important role as it serves
as the local decision making body with state institutions, such as the District Development
Committee (DDC), District Office and other line departments. Even today state agencies
coordinate and consult with local customary institutions and Mukhiyas to implement
development projects and programs.

16. 16
In a case study conducted in Upper Mustang, (Neupane 2010) many young people were found to
be reluctant to follow the traditional regulations and norms. In recent times, the rising frequency
in the violation of irrigation norms has given rise to an increased number of conflicts. As more
efforts are being made by external agencies to use and manage CPRs for income generation,
customary institutions are still facing various climatic and non-climatic challenges. Anecdotal
evidence gathered from local communities indicates that climate change is being observed by
locals. But local-level adaptation strategies are yet to be embedded into local policies and
community plans.
Based on a vulnerability assessment spider chart, further assessment of people‟s perception of
climate change in Marpha and Pangling villages are listed in Figure 4.
Figure 4: Assessment of location specific community hazard ranking.
Figure 4, illustrates an analysis of people‟s perception of community hazard ranking. There are
differences in perception between the two villages. Insects and diseases are more of a concern in
Marpha due to its lower altitude. Due to rising temperatures, the relation of phenology and
species change to higher altitudes is evidence in mountain regions. Studies from the Indian
Himalayas provide evidences that climate change is causing noticeable effects on life cycles and
distribution of the plant species. A need for research to improve understanding of these effects on
high-altitude medicinal plants and issues need immediate attention (Gairola, Shariff et al. 2010).
(Singh and Bengtsson 2005), mention that snow- fed basins are more sensitive in terms of
reduction in water availability due to a compound effect of increase in evaporation and decrease
in melt. This may be in the case of Pangling, as the impact of warmer climate on melt from
snow-fed streams decrease or dry as mentioned in the spider diagram. Communities in Pangling
are thus concerned and rank „dryness‟ and lack of irrigation water for agriculture productivity
higher than other hazards.

17. 17
DISCUSSION
Experiences from other mountainous areas, including other areas of Nepal and parts of northern
Thailand, indicate that specialized cash crop production is concentrated in pocket areas where
suitable agro-ecological and socioeconomic conditions coincide. Understanding the controlling
factors for such successful transformations can be useful for future planning. However, the
transfer of lessons learned is only possible to areas with similar conditions. In other areas,
unsuitable agro-ecological conditions or high transport costs are likely to inhibit the development
of a profitable cash crop-based rural economy. Moreover, competition from other Himalayan
horticulture-producing areas in third countries is increasing, especially since the recent
liberalization of the Indian market (Turkelboom, Gurung et al. 2001). Developed countries have
established well-defined property rights over numerous resources and, in some instances, have
extended non-exclusionary rights over privately owned resources for an extended period of time.
In the developing world, however, the share of community property is extensive, either as a
response to an expanding market or because market exposure is still in nascent stages. This,
coupled with the demands of globalization, has led to the co-existence of the community
ownership of resources and the evolving private property rights market. Tension between public
and private ownership rights is particularly relevant in the developing countries of South Asia,
not only because of the region‟s shared history but also because its resources frequently cross
national boundaries (Ghate, Jodha et al. 2008). Studies of commons tend to be relatively
negligent in examining how aspects of the resource system, some aspects of user group
membership, and the external social, physical, and institutional environment affect institutional
durability and long-term management at the local level (Ostrom, Gardner et al. 1994; Lam 1998;
Agrawal 2001). The Trans-Himalayan region of Nepal is often referred to as the country‟s desert.
Water is a scarce resource that has traditionally been managed through local norms and
institutions. The remoteness of the region has limited the role and influence of the central
government. Although the locally managed irrigation system has been running for centuries,
recent developments challenge the sustainability of this approach in the long run (Neupane
2010).
Development investments in research areas are mostly top down, overwhelming customary
institutions. A mindset of full dependence on the state develops as a result. One example we can
draw from this research is a state-supported irrigation channel in Pangling watershed. The
irrigation channel is now in need of further maintenance to fix water leakages; however, the local
or customary institution does not consider it their sole responsibility to repair the channel. They
expect the State to support in maintenance work. The distribution of property rights is important
because resource users must, at a minimum, have access, withdrawal, and management rights to
maintain sufficient incentive for users to responsibly manage resources over the long term
(Ostrom and Schlager 1996; Imperial and Yandle 2005). Communal Horticulture directive from
local DDC should be mentioned here as evidence that guaranteed management rights brings local
interest to the fore. However, subsidised development culture does not allow a sizeable voluntary
contribution and ownership.

18. 18
The incentives of governments to secure common property rights are mixed. Most governments
have a strong incentive to generate revenues through investment in extractive industries or non-
consumptive use, such as conservation and tourism (Fuys, Mwangi et al. 2006).
(Bhattachan 2002) gives an example of a democratic grassroots voluntary system in the Mustang
area called „Posang‟, which has been managing local governance through a unique system of
resource governance and regulations. Community members manage local governance issues,
from managing natural resources to ensuring justice and social wellbeing and organizing
festivals. However, such traditional systems have been marginalized after the adoption of multi-
party democracy in 1990 brought about policy reforms and change management which resulted
in the formation of formal local bodies such as Village Development Committees.
Irrigation projects and programs in Mustang and in other parts of Nepal have worked to improve
the availability of water with the support of the national government and donor organizations.
Although the goal of these programs is to benefit farmers, because they rarely recognise existing,
locally-sanctioned norms, they risk destroying the social capital that has developed over
centuries in these local communities. Many studies have shown the crucial role that such social
capital plays in the governance of common resources. It takes a long time to develop accepted
rules and norms of governance for these resources, but relatively little time to erase them
(Neupane 2010). The arguments above about changes in resource use and management
institutions under the influence of markets are in line with more general perceptions about the
transformative role and potential of new capital, market forces, and institutions. But the
differences between market and population pressures need greater attention in any examination
of commons institutions. It is important not only to attend to different levels of these pressures,
but also the effect of changes and rates of change within them (Agrawal 2001).
With the exception of Upper Mustang, where tourism-related business is emerging as an
additional source of income, there is little evidence of livelihood diversification in other
rangelands of the HKH (Jasra, Joshi et al. 2012).
CONCLUSION
Local CPR governance is increasingly being tested by a host of stakeholders so far unknown to
the Mukhiya System. Thus more development investments are being made in the region by the
state through participatory approaches trying to make local decision-making a more inclusive
and intensive process. Similarly, wide range of market actors such tourism developers and
natural resource processing companies are interacting with local populations for a win-win
outcome of local investments. In a fast degrading landscape and economically fast changing
social scenario, and processes of in-and-out migration, emerging issues of natural resource
governance, new policies and practices and climate change are testing the resilience of an
institution which has sustained itself with an admirable quantum of robustness when it comes to
delivery and acceptance of decision-making by local populations. Both primary and secondary
data show that despite major socio-economic and developmental changes taking place in
Mustang, the Mukhiya System as means to govern CPRs has prevailed. As a major conclusion, it
can be endorsed that the system will remain intact in times to come. Some specific conclusions

19. 19
are however drawn from the study as follows, which should reflect on the necessary institutional
changes required to counter the host complex and yet unknown impacts of mixture of climatic
and non-climatic factors:
 Mukhiya system is still the key local decision-maker which means that all external
interventions and investments by any kind of stakeholder need to get the approval from it.
However, there is clear tendency that external agencies are pushing for externally driven
norms and procedures for CPR management
 Mukhiya system is provenly efficient when it comes to timely and satisfactory decision-
making (e.g. social justice, CPR conflicts) as compared to state service delivery
mechanism, thus so far sustaining its local ownership
 Mukhiya System is a resilient and accepted institutional arrangement for CPR related
decision-making though community members and even Headmen are perceiving the need
for change as issues of gender, inclusiveness, equity, in-migration, economics and
degradation become complex to handle
 Roles of CPR‟s to support rural livelihoods over time has changed as diversification of
household requirements and incomes take place
 Mukhiya system could be challenged by the out-migration of the youth and men and
women become the dominant community group
 Non-climatic and climatic factors in future though are going to test this institutional
arrangement further but it is very much possible that the Mukhiya System will adopt and
adapt to changes in its roles, norms and procedures as long as the Nepalese state is
unsettled when it comes to the political system it adopts.
RECOMMENDATIONS:
Though the study could not be completed in terms of expected sample surveys, above
conclusions drawn build the base for some key recommendations:
 Before making development and policy-related changes, it is crucial to first determine a
sound institutional diagnosis of customary institutions and then match their strengths and
weaknesses against future challenges and create a demand for changes in the institution
itself.
 There is a need for a consultative process in the change management of customary
institutions as well as a need for socio-institutional engineering and sensitization
processes.
 Learning should be conveyed to decision makers at both policy and practical levels in
order to design reform processes and policies accordingly. These policies and reform
processes must recognise and try to mainstream tried and tested coping principles of such
institutions.
 As stakeholdership and number of stakeholders for the local socio-economic
development and conservation is increasing, it becomes important that awareness of such
institutions on emerging challenges and opportunities is made and monitored.
 Mukhiya System is aware that women are becoming important actors for the above
development and conservation hence need to be part of the local decision-making. Hence

20. 20
social-engineering process must be started with these institutions to broaden their horizon
and mandate on restoring local landscapes and building local economy.
 On the basis of this research, it is argued that policy and customised programmes should
focus on facilitating the emergence of effective, local institutions for natural resource
management. Of which Mukhiya system is integral part.
 The overuse of CPRs, markets and future climatic conditions need to be assessed before
such interventions.
ACKNOWLEDGEMENTS
The authors wish to thank the communities of Lower Mustang involved in this research,
especially local farmers and „Mukhiyas‟ for taking time to share their knowledge and provide a
deep understanding on CPRs. We would also like to thank Local Initiatives for Biodiversity,
Research and Development (LI-BIRD), for their assistance with fieldwork. Our special thanks to
our colleagues from ICIMOD, Mr. Madhav Dhakal, Mr Kamal Aryal, Ms. Manohara Khadka,
Ms. Anju Pandit, Ms. Renate Fleiner and Mr. Dyutiman Choudhary for sharing field information
and analysis from ICIMOD‟s HIMALI project used in this research, and also to Ms. Amy
Sellmyer for providing editorial inputs.
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